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AIRPORTS COMPANY SOUTH AFRICA INCREASES TARIFFS BY 5, 6 PERCENT WITH EFFECT FROM 1 APRIL 2014

Monday, April 07, 2014 | 00:00

Johannesburg, 1 April 2014 – Airports Company South Africa has increased its tariffs by 5, 6% effective 1 April 2014. The increase, which was approved by the Regulating Committee, was implemented in consultation with the relevant industry stakeholders. The tariff increase was published in the government gazette dated 20 December 2013 (Notice 1228 of 2013) as required by the Airports Company Act No. 44 of 1993.

Airports Company South Africa Financial Director, Maureen Manyama-Matome said, “The airport charges are one of the revenue sources for the company. This practice is not peculiar to South Africa’s aviation industry as it is standard practice globally. The increase is CPI-linked and took into account the sluggish economic conditions and the impact of high fuel prices on the operational viability of the aviation industry.”

The tariff increases represent the period whereby the company continues to recoup the R17 billion-investment made during the period 2007 to 2010.

“This is not an imposition from Airports Company South Africa but a Regulating Committee undertaking dating back to 2007. The company could only start levying tariffs, at the insistence of stakeholders, once infrastructural developments were completed and in use. Moreover, the industry was informed that the resultant levies of the five-year cycle would be substantial”, elaborated Manyama-Matome.

According to Airports Company South Africa, the aviation industry has experienced very low tariffs, whilst the company was using its balance sheet to borrow funds for funding the aforementioned R17 billion-investment. This tariff increases represents the last cycle of the 2011 – 2015 permission cycle.

In addressing industry concerns pertaining to increases, Airports Company South Africa has proposed a review of the current economic regulatory framework to ensure that there is transparency, predictability and balance between risk and rewards.

The tariff increase covers airport charges that consist of landing charges, parking charges and a passenger service charge.

As of 1 April 2014, the Passenger Service Charge (including VAT) in South Africa will be as follows:

Category

2014

Domestic

R127.00

Regional (Botswana, Lesotho, Namibia and Swaziland)

R263.00

International

R346.00

Summary of the tariff increases applied for by Airports Company South Africa and the Regulating Committee’s response: